GVIC Communications Corp.
TSX : GCT

December 24, 2014 11:30 ET

GVIC Communications Announces Asset Sale

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 24, 2014) - GVIC Communications Corp. ("GVIC" or the "Company") (TSX:GCT) is pleased to announce that it has sold its interest in Iron Solutions, Inc. ("Iron Solutions").

GVIC sold its interest along with the other shareholders of Iron Solutions as part of a sale of 100% of Iron Solutions to Trimble. Iron Solutions is based in Franklin, Tennessee and is a seller of integrated software services for agricultural equipment dealerships. GVIC received C$4.3 million for its interest, of which C$0.6 million will be placed in escrow.

The sale of the position is part of GVIC's previously disclosed program of value enhancement initiatives designed to 1) narrow the spectrum of businesses owned and managed by the Company in order to deploy capital, resources and effort in high growth areas and maximize operational focus and effectiveness, and 2) cover the required deposit relating to the Company's previously disclosed obligation to Canada Revenue Agency and further strengthen its financial position.

While GVIC intends to continue its growth in the agricultural sector and expand its position as a leading provider of agricultural information, it was deemed prudent to sell the interest in Iron Solutions at an attractive valuation and focus efforts and capital on organic growth and acquisitions over which it has greater operational control. The transaction reaffirms the value creation potential of GVIC's overall focus on the business information and rich data space.

The Company sees strong growth opportunity in the global agriculture, energy and mining information sectors, given Canada's important global presence in these sectors and the strong competitive position GVIC owns in the related Canadian natural resources information space.

GVIC is pursuing these growth efforts in its business information operations through a comprehensive Evolve, Enrich and Extend strategy. The strategy focuses on providing richer content, data and information, related analytics and business and market intelligence, as well as more comprehensive and sophisticated marketing solutions. Through this enrichment, products and services achieve greater customer utility and decision dependence. The strategy is intended to provide growing levels of sales from high-margin products with high levels of recurring revenue, while requiring low levels of sustaining capital investment in order to generate strong free cash flow and return on capital.

Approximately 60% of GVIC's earnings before interest, taxes and depreciation (EBITDA) now comes from business information operations.

Shares in GVIC can be traded on the Toronto Stock Exchange under the symbol GCT.

About the Company: GVIC Communications Corp. is an information communications company focused on the provision of primary and essential information and related services. GVIC is pursuing this strategy through its core businesses: the trade information, business and professional information markets, and community media.

Forward-Looking Statements

This news release contains forward-looking statements that relate to, among other things, the Company's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates. These forward-looking statements include, among other things, statements relating to strategic initiatives and future growth and acquisitions. These forward looking statements are based on certain assumptions, including continued ability to pay dividends, and are subject to risks, uncertainties and other factors which may cause results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, and undue reliance should not be placed on such statements.

Important factors that could cause actual results to differ materially from these expectations include failure to continue to generate sufficient cash flow to pay dividends and the other risk factors listed in the Company's Annual Information Form under the heading "Risk Factors" and in the Company's MD&A under the heading "Business Environment and Risks", many of which are out of the Company's control. These other risk factors include, but are not limited to, the ability of the Company to sell advertising and subscriptions related to its publications, foreign exchange rate fluctuations, the seasonal and cyclical nature of the agricultural industry, discontinuation of the Department of Canadian Heritage's Canada Periodical Fund, general market conditions in both Canada and the United States, changes in the prices of purchased supplies including newsprint, the effects of competition in the Company's markets, dependence on key personnel, integration of newly acquired businesses, technological changes, tax risk and financing and debt service risk.

The forward-looking statements made in this news release relate only to events or information as of the date on which the statements are made. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Contact Information

  • Mr. Mark Melville
    Executive Vice-President
    604.418.5972